To add to all the advice being ladled out to Satya Nadella, Microsoft’s new chief, here’s another piece: stop bothering with Windows Phone. It’s a waste of money which will never pay off.

Instead, focus the efforts of Microsoft and soon-to-be subsidiary Nokia on forking Android – because that way you can exploit the huge number of Chinese handset makers who want to burst out of China and sell to the rest of the world.

Here’s the thing: Windows Phone was too late in coming to the smartphone race: when it was released in October 2010, the starting gun had long been fired. The race had been on for years before Microsoft showed up with a competitive product, and that meant the rival ecosystems had plenty of time to capture markets.

In the US, Android and iOS make up 93% of the installed base of smartphones, with Microsoft on 3.1%, at a time when 65% of mobile phone users wield a smartphone. The remaining 35% will be increasingly difficult to reach, and likely less interested in using a smartphone. Windows Phone has arrived too late for them.

In reality, Windows Phone has a very small user base; Paul Thurrott estimated it recently at 50m worldwide, which sounds reasonable. Compare that, though, against more than 500m iPhones and, conservatively, 800m Android phones (using figures from Flurry from mid-2013) - or perhaps a billion Android phones including those in China which don’t use Google services - and you realise that Windows Phone hasn’t just got a mountain to climb; it’s a sheer overhanging cliff.

At this point someone is certain to say “Aha! But Windows Phone is outselling iPhones in 24 countries!” This comes under the heading of “true (at the time the data was collected, which was just ahead of a new iPhone launch), but irrelevant”. The reality is that in every single one of those countries, Android is outselling Windows Phone. And the iPhone is outselling Android in one country - Japan (always a law unto itself, phone-wise).

However, there are no countries where Windows Phone is outselling both Android handsets and the iPhone. Because it is always selling fewer than one or the other (or both, as is the case in many big European countries), it is continually falling further behind the three real mobile ecosystems (Google Android, non-Google Android in China, iOS). The chances of Nokia on its own ever catching the iPhone for installed base - which, remember, is the total of phones in peoples’ hands that has accumulated over years, not one month’s sales - in key territories such as the US and Europe are below minimal.

In the US, a key market for all sorts of things, there are presently 65 million iPhones users and 80 million Android users, according to ComScore - and 4.8 million Windows Phone users. There are 83 million featurephone users left. If you truly believe Windows Phone will capture those remaining users in any significant amount, or persuade large numbers of Android and iPhone users to abandon their handset, your faith is touching, but surely misplaced. Windows Phone is nice enough. But this is about reality.

That red line struggling to take off? That’s the background to the problem. Now, what about the solution?

Killing Windows Phone would be dramatic. But it’s a distraction at a time when Microsoft needs focus. As someone who has come from the cloud side of the business, Satya Nadella knows about providing services. (It’s said that Apple’s iCloud uses Microsoft’s Azure for some of its services.) As someone running a company which is going to focus on “devices and services” (via Steve Ballmer), the question is: which do you want to make your money from?

Services everywhere

Apple’s good at devices, so-so at services. Google’s nowhere in devices, top-notch at services. Where does Microsoft want to be? As John Gruber argues, it should be trying to offer Microsoft services on every device, everywhere:

Satya Nadella needs to find Microsoft’s new “a computer on every desk and in every home running Microsoft software”. Here’s my stab at it: Microsoft services, sending data to and from every networked device in the world. The next ubiquity isn’t running on every device, it’s talking to every device.

So how does dumping Windows Phone and forking Android achieve that? First, it means that Microsoft doesn’t simply waste the money and talent from the Nokia mobile acquisition. Nokia’s expertise is in hardware and the supply chain. Microsoft’s is with software.

Forking Android wouldn’t be trivial, but Microsoft could take the Android Open Source Platform (AOSP) that is already widely used in China and put new services on top. It is already licensing Here maps from Nokia (the bit that’s not being sold to it). It could add its own mail client and app store. It has its own search engine, Bing, which has needed a major mobile deal. As with Windows Phone, setting up or signing in to an outlook.com email account could be your first step. Everything’s ready.

Most useful of all, developers who have written Android apps would be able to port them over with minimal effort - as has happened with Amazon’s Kindle Fire effort. (That also uses Nokia’s maps.) Microsoft already knows how to run an app store. There’s also the example of BlackBerry, which in its desperate efforts to create an attractive app store for BB10 (launched in 2013, and so at least five years late) has made Android compatibility a major playing point. (BlackBerry’s problem is that it can’t sell enough handsets.)

After all, what’s been the biggest complaint about Windows Phone? Not enough apps. The handsets have been fine (that’s Nokia’s expertise) but the wildly popular apps for Android and iOS haven’t been ported. Going with AOSP would suddenly bring those in reach. And developers would love having a parallel customer base to reach.

Plus it would make shifting from a Google Android phone to a Microsoft phone (now on AOSP) a lot simpler - and that’s what Microsoft wants to do. At present it’s a tough job persuading rival users to migrate.

Though existing members of the Open Handset Alliance (that is, those handset makers who make devices with Google services installed) wouldn’t be able to sell Microsoft-Android handsets, there are plenty in China who would be happy to – and make them in volume. They could be additive to Nokia’s business, which could focus on the high end (where its cameras excel, but volumes are limited) while Chinese vendors aim for the rest of the market.

The patent carrot

One other carrot that Microsoft could dangle: it could promise to not demand patent royalties from Android manufacturers which come over to its version. Microsoft has been busily suing the members of Google’s OHA, demanding (and getting) licensing payments for patents that it claiims over Android use on handsets and other devices. So far, it has around 20 companies (including Samsung and HTC) signed up, and Jan Dawson of Jackdaw Research calculates (based on some easily-overlooked details in Microsoft SEC filings) that it is heading towards being a billion-dollar business.

By offering not to charge for patent licensing, Microsoft could make its forked Android much more attractive to handset companies, because they wouldn’t have a per-device overhead, which seems to average out to a few dollars per device. That doesn’t sound much, but it can be the Micawber-ish difference between profit and loss for a handset maker.

Conclusion

Windows Phone was a wonderful project, but it was too late; the benefits of integration across handset, tablet and desktop simply haven’t appeared. The vast majority of people who use a desktop PC don’t use a Windows smartphone, and there’s no chance of that changing any time soon - or ever, actually.

AOSP offers Microsoft the chance to remake its mobile strategy so that it exploits all the strengths of its most bitter rival – it’s free, widely available – and grab mobile developer interest. An all-out war between Microsoft and Google using the Android platform would be absolutely fascinating; both would be pressed on their strengths and weaknesses. For Microsoft, presently a distant third in this race, it could be the answer it needs.

My only fear is that while Nadella might have the vision and audacity to do this, that one voice in the Microsoft boardroom would resist throwing away years of effort. But let’s hope if this idea comes up that Bill Gates, in his new role as “technical adviser”, will see the potential in it - and won’t reject it as being “un-Microsoft”. Microsoft has tried that, and it hasn’t worked. Now it needs to try something that will.